The Chicago Purchasing Managers Index fell to 46.1 in September, well below economists' average forecast of 52. Not only did the level miss estimates, but it suggested that conditions deteriorated, as any reading below 50 means that economic activity has contracted.

Shares sold off sharply following the report but manged to claw back some of their losses by the close. The blue-chip Dow Jones Industrial Average ($INDU) fell 30 points, or 0.3 percent, to settle at 9,712, while the broader S&P 500 dropped ($INX) 4 points, or 0.3 percent, to 1,057. The tech-heavy Nasdaq Composite ($COMPX) slipped two points, or 0.1 percent, to finish at 2,122.
Laggards among the Dow components included JPMorgan Chase (JPM), shares of which fell more than 2.3 percent, and Disney (DIS) and General Electric (GE), each of which fell 1.7 percent.